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Oil prices jump as stocks sink

LONDON: World oil prices rallied and European equities sank yesterday with investors unnerved by key crude producer Russia’s attack on Ukraine. Brent oil surged more than five percent to top $103 per barrel and approach recent 2014 peaks, on the eve of a key output meeting of OPEC and non-member producers including Russia.

Frankfurt and Paris stock markets meanwhile accelerated losses to shed around three percent in early afternoon deals. London slid 1.4 percent, as investors shrugged off Asian gains. “European stocks are once again heading lower with Russia/Ukraine headlines continuing to hurt sentiment,” City Index analyst Fiona Cincotta told AFP.

“Losses on the FTSE are modest, thanks to a strong performance from resource stocks, as commodity prices rise.” Frankfurt’s steeper losses were “unsurprising given Germany’s reliance on Russian energy”, she added. Bitcoin gained five percent to $43,603 with strong support for the world’s most popular cryptocurrency in Russia, where many investors are seeking shelter from the nation’s sanctions-ravaged economy.

Key European stocks indices had also fallen Monday after world powers imposed new sanctions on Russia. With no let-up in the assault on its neighbor, Russia has been pummeled by a series of widespread and debilitating sanctions. The measures have sent the ruble crashing to a record low, hammered Russia’s stock market and forced the central bank to more than double interest rates to 20 percent.

The Moscow Stock Exchange remained shut yesterday in an attempt by authorities to stave off another widely expected dramatic sell-off. The crisis has also ramped up fears about supplies of crucial commodities from the region including wheat and nickel but particularly crude, just as demand surges owing to economic reopenings. The conflict provides an extra headache for global central banks, who will likely have to recalibrate their plans to tighten monetary policy as they try to support their economies.

Back in London, Shell’s share price dipped 0.7 percent after the energy major announced it would sell its stake in all joint ventures with Gazprom, following Russia’s invasion of Ukraine. The news came after rival energy titan BP also signaled its exit from Russia. TotalEnergies yesterday said while it would stop providing capital for new projects in Russia, the French giant was not withdrawing from current projects in the country.

Nevertheless, “there has been a mass exodus by Western companies from Russia in recent days as the Kremlin looks increasingly isolated and fragile”, said Hargreaves Lansdown analyst Sophie Lund-Yates. “It is clear that while most pain will be felt by Moscow, these decisions will weigh on European businesses too, which will come through in their next quarterly results,” she noted.- AFP

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